Thread on Investing Insights and Learning from @safiranand
πππ
Opportunity cost
βIn economics, one of the first lessons He learned was that capital is limited and has alternative uses, including satisfaction of consumption. You can do your best to find a good use for its growth.
As long as the search for yields and risk minimization is in balance, you can do well,β
β Compounding
βThe larger opportunity gets insured with time, and even if there are temporary setbacks to numbers or margins or the like, you can still compound,
β The scalability element is more attractive both in terms of upward curves in the bottom line as well as the top line. In many instances, even a single catalyst like a huge order or Capex can change the fortune of such a company,
β Things to watch before Investing
The first thing Onc have to look at is the opportunity size of the business, followed by the qualification or temperament of the management.
β Valuation
βMore than price-to-earnings (P/E) ratio, One should look at the market capitalization to potential.
β Lessons
One of the core areas to focus on is to examine what went right and why, and what went wrong and why. Sometimes, our returns maybe just a function of a market tide and one should not read too much talent in it. Similarly, there are costs of omission and commission,
β His Journey
Safir Anand entered the market as an observer (student) in his college days. Then, with limited pocket money, he started picking odd stocks, and then as a momentum investor, he got swayed by the IT boom and bought with the tide to eventually lost money.
More serious investing started around 2005 with his own savings. But the year 2008 was quite unkind to him as was the case with most investors, but he says it also thought him immense lessons on greed and fear.
Bonus Quote
The stock market is a great teacher as long as you respect it.
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The only way to understand investing better, [Investing] shows, is to understand the world better. Ideas spark off the page at every turn. This is simply a gem of a book.
The book is the classic guide to getting smart about the market. Legendary mutual fund pioneer John C. Bogle reveals his key to getting more out of investing: low-cost index funds
Rule of 72 (Double Your Money)
Rule of 114 (Triple)
Rule of 144 (Quadruple)
Rule of 70 (Inflation)
4% Withdrawal Rule
100 - Minus Age Rule
10, 5, 3 Rule
50-30-20 Rule
3X Emergency Rule
40β EMI Rule
Life Insurance Rule
β» Rule of 72
No. of yrs required to double your money at a given rate, U just divide 72 by interest rate
Eg, if U want to know how long it will take to double your money at 8% interest, divide 72 by 8 and get 9 yrs
At 6% rate, it will take 12 yrs
At 9% rate, it will take 8 yrs
πRule of 114
No. of years required to triple your money at a given rate, U just divide 114 by interest rate.
For example, if you want to know how long it will take to triple your money at 12% interest, divide 114 by 12 and get 9.5 years